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Quotation of the Day…

To put it another way, ordinary people became rich. The real wage exploded, at least the real wage measured in terms of the cost of light. Illumination went from being a major heading in the consumer basket to being so small a fraction of consumption that, by the 1940s, it was expected that soon it might be free.

That was the essence of the experience of economic growth. The concept itself emerged only slowly in economic discourse from the nineteenth-century notion of “the national dividend.” For a long time it was more or less synonymous with “the standard of living.”…. And now [Yale economist William] Nordhaus was warning that the official estimates of growth, conceptually at least, were way off, because the manner in which new goods were linked into the index. Estimates of real income were only as good as the price indices were accurate. And it seemed that price indices, by their very nature, simply ignored the most important technological revolutions.